Wouldn’t want Siri to get lonely… The Hustle Tues, Dec 12 Brought to you by Grow… visualized data dashboard heaven. One of tech’s biggest seed investors is a Chinese billionaire you’ve never heard of Most people are familiar with the major venture capital firms backing Silicon Valley’s start-ups: we’re talkin’ Sequoia Capital, Andreessen Horowitz, Khosla […]
Brought to you by Grow… visualized data dashboard heaven.
One of tech’s biggest seed investors is a Chinese billionaire you’ve never heard of
Most people are familiar with the major venture capital firms backing Silicon Valley’s start-ups: we’re talkin’ Sequoia Capital, Andreessen Horowitz, Khosla Ventures, and the rest of the gang.
But on the more granular level of early-stage investing, a relatively low-profile Chinese billionaire named Shan Xiangshuang has stealthily built the largest seed fund in tech.
In 3 years, he’s covertly funded more than 350 early-stage companies with $40m worth of “small” investments ranging from $23k to $250k.
Shan the Man
Back in 2015, Shan, the chairman of a multi-billion dollar private-equity fund, set up VC fund Hone Capital.
Armed with $115m in funding, Hone’s game plan differed from that of other funds: instead of selectively picking out solid companies to invest large sums of money in, they’re taking the “spray and pray” approach: investing in “hundreds of quality early-stage startups as fast as possible.”
Today, Hone is the biggest seed investor in the Valley, throwing down more in 3 years than other top seeders have in 2 decades.
But how do they define a “quality” investment?
Doling out seed capital is like investing in a newborn baby’s future success: it’s high-risk and extremely challenging to pick out a “winner” so early on.
That’s why back in 2015, Hone invested $400m in AngelList, a site that allows startups to raise seed capital from investors. On the platform, investors can create “syndicates” — or funds used just to make a single investment.
Hone’s investment gave them “unfettered access” to these syndicate deals, and it has since built its own algorithm to sift through them and pick out those with the best chances of succeeding.
Has this actually worked?
Shan estimates that his fund will yield returns similar to those posted by the top 20% of investors.
But the thing about seed investing is that it takes patience: you gotta let the baby grow up, graduate high school, have a first kiss, and get a billion-dollar valuation before you know if your investment paid off — and that’s a process that often takes 5 to 10 years.
Planting seeds of clout
Chaos reigns as bitcoin debuts on Wall Street
Bitcoin futures started trading on Cboe Global Markets Inc.’s exchange yesterday — marking the first launch of crypto futures on a regulated exchange.
Fuzzy on futures? We published a quick explainer 10 days ago (back when bitcoin was worth a measly $10k), but essentially, it’s allowing investors to “bet” on the future price of bitcoin.
Within the first 3 hours of trading, heavy traffic caused slowdowns on Cboe’s website, and a 26% surge in trading price triggered 2 temporary trading stops designed to “calm the market…”
BUT THE MARKET’S READY TO RAGE
The hope was to give traditional investors a lower risk way to get in on the action, but if Monday’s skyrocketing prices are any indication, the only thing more volatile than bitcoin is bitcoin futures.
Cboe’s $41m bitcoin futures traded made up just 3% of the $1.2B global bitcoin trade in opening hours Monday.
And they’re only the first exchange to enter the fray — Nasdaq plans to offer bitcoin futures in 2018. Meanwhile, some brokers remain skeptical of the futures market, criticizing US exchanges for rushing to cash in on crypto… but maybe they’re just jealous they didn’t call it sooner.
Apple finally acquired everyone’s favorite music app Shazam on Monday, after reports of a deal negotiation surfaced last Friday.
The price tag is rumored it to be around $400m, which would mean a major discount from the Shazam’s last valuation, listed at $1B.
Daaang, what happened?
Shazam started in 1999 as a service where people could call a phone number, hold the receiver up to a source of music, and be texted the name of the song and its artist.
Then in 2008, they launched an iPhone app that could name just about any song in a matter of seconds.
Unfortunately, like many revolutionary companies, Shazam’s bread-and-butter technology is now attainable for anyone with a few engineers and a mattress full of cash.
In 2016, Shazam only made $54m in revenue, forcing them to slap their name on a game show hosted by Oscar-winner Jamie Foxx (not sure who the biggest sellout is here).
But being part of the world’s most profitable company ain’t a bad gig
And word on the street is it’s great timing for Apple, too: they’re only months away from releasing their new HomePod smart speaker, so they’re hoping Shazam will OG music-recognition tech to compete with juggernauts, Google and Amazon.
Credit card companies are finallykilling off receipt signatures
Starting in 2018, big boy credit card companies including MasterCard, Discover, and American Express will finally cease requiring cardmembers to sign their receipts after a credit card purchase.
Why? Because why did we ever need to in the first place?
Seriously though: why?
The whole point of signing credit card receipts is for identity verification purposes. See, back in the dark ages, merchants would compare the signature on the back of a credit card with the signature on a receipt to make sure no funny business was going on.
But a lot of people don’t sign the back of their CC’s anymore — and with new technology like EMV chips (and with online shopping leaving brick-and-mortar purchases in the dust), merchants no longer feel an absent signature poses a liability issue.
That’s all it is: a safety measure that allows merchants to keep their $500 that a fraudster spent on a new sofa with Sad Sam’s credit card.
The dawn of a new age
People have been scoffing at receipt sigs for nearly a decade, and this move will bring a good 12 seconds of lost time back into our lives each day. Seconds that we could be spending with our families…
I know, that headline is as clickbait as can be. But guess what? It’s true.
For the last 6 weeks, I’ve been testing ways to help me break my addiction to my phone. Deleting the Facebook app, turning off Slack notifications, and using airplane mode — these things have worked okay.
But, after doing some research, I randomly came across a simple trick that’s helped me use my phone much less.
Made popular by ex-Google designer Tristan Harris, Grayscale is when you turn your phone screen completely gray, removing the vibrant colors. I’ve found this to be, hands down, the most useful action for making myself check my phone less.
If you have an iPhone, here’s how you do it: Settings > General > Accessibility > Display Accommodations > Color Filters. Switch Color Filters on and select Grayscale.